Cannon sells Eldridge Pope to Marston's for £155m

By Harry Wallop

12:01AM GMT 26 Jan 2007

Michael Cannon, a former poultry farmer who failed his 11-plus, has underlined his reputation as one of the shrewdest dealmakers in the pub sector by selling the Dorchester-based pub company Eldridge Pope for £155m.

The sale of the former brewer comes just two years after Mr Cannon bought it for £42m, plus £40m of debt. He has made 2.8 times his original investment, an impressive return that was shared by 320 private Eldridge Pope investors that refused to sell out two years ago.

Mr Cannon, 67, has sold the 153 pubs to Marston's, the re-named Wolverhampton & Dudley Breweries.

Ralph Findlay, the chief executive of Marston's, insisted he had no regrets that he had not bought Eldridge Pope two years ago, when he and Mr Cannon were in competition for the business. "At the time we concluded it would have been much easier to turn around the estate in the private arena. The deal would have been very dilutive for a PLC," he said.

Mr Findlay praised Mr Cannon transformation of Eldridge Pope, which had struggled in recent years, especially with its Toad chain of high street bars. In the last two years the Toads have been sold or converted to the Que Pasa Bar format, which Mr Cannon already owned.

City analysts welcomed the deal, saying Marston's had paid a low price compared to many recent pub deals, at 8.6 times operating profits, against 10 or 11 times, paid by rivals in similar deals.

The acquisition takes Marston's further down south, away from its West Midlands heartland and putting it head to head with arch-rival Greene King. Mr Findlay declined to comment on industry speculation that the two are contemplating a merger.

After a brief stint as a poultry farmer, Mr Cannon started buying struggling pubs in the 1980s, turning them around, before selling them on for a profit. He sold the Morrell's brewery and pub company in Oxford to Greene King in 2002. He also owns a £100m hamburger chain in the US called Fuddruckers.

He has spent a bit of his fortune buying some of the finest grouse moors in Britain, buying the historic 17,000 acre Wemmergill estate in co Durham last year for £5.25m.